Renewables are making big moves into US electricity generation, and Forbes, the self-described “capitalist tool,” is not shy about toting up the damages. On December 7th, the publication, a bellwether for conservative economic thinking in the US, ran a contributor piece outlining how natural gas is pushing coal out of the market for power generation. On December 30th, Forbes followed up with another contributor piece describing how solar is gunning for both coal and natural gas.
Natural Gas — And Renewables — Vs. Coal
The main reason for the dramatic shift in US power generation in recent years is clear. The industry consensus is that the shale gas boom resulted in a flood of cheap natural gas that pushed coal out of the running for new power plants.
In his December 7 piece, Forbes contributor Ken Silverstein also notes the growing role of renewables:
Certainly, the newfound supply of shale gas coupled with stricter regulations on coal-fired power plants are causing some of the shift from coal to natural gas. But the falling price of both wind and solar technologies is also encouraging those investments, along with favorable tax laws.
Silverstein touches on another important point regarding the interplay of coal, natural gas and renewables. Even as more wind and solar enter the grid, natural gas could still have some wiggle room left in which to grow.
Gas power plants are cheaper to build than coal. They are also cheaper to operate, partly because they can be ramped up and down more efficiently to match fluctuations in demand and supply, including those related to wind and solar sources.
An earlier Forbes contributor piece, published on December 30th, also cites the disadvantages of coal power generation (and, for that matter, nuclear) compared to natural gas:
“They cannot provide the essential resiliency and reliability services that we need, like voltage support, reg-up, reg-down, primary frequency response, secondary frequency response. Coal and nuclear plants are just not good at anything but spinning reserve.”
Renewables Vs. Natural Gas
On the downside, natural gas can travel long distances from the wellhead to the power plant, which is not necessarily an effective strategy for ensuring grid reliability and resiliency.
More to the point, the natural gas window is beginning to slam shut.
The December 30 piece in Forbes, by Brian H. Potts, describes why gas power generation is not necessarily destined for robust growth in the sparking green grid of the future:
First, he sets the table for solar:
…utilities in certain areas of the country don’t just have to provide energy; they’re also required to ensure that there is enough power plant capacity on the grid at times of peak usage. This is where solar becomes economic. When energy demand is high, typically during the afternoon hours of a hot summer day, solar is at its best. This makes it a valuable asset to utilities for capacity purposes.
Then, he closes the window:
…it has become cheaper to build new solar power plants than these natural gas peaking plants. When coal plants retire, utilities are therefore likely to replace that lost capacity with solar, meaning utility-scale solar construction could explode in 2018 given coal’s precarious market position.
It’s also worth noting that the one-two punch of renewable energy plus storage is looming over the power generation industry.
As evidence that the natural gas power generation market is shrinking, leading global turbine manufacturers GE and Siemens both recently announced layoffs in their power divisions. The layoffs were related to a downturn in demand for gas turbines.
On The Other Hand…
Before you get too excited, squeezing natural gas out of the power production marketplace doesn’t mean a reduction in natural gas drilling in the US, much less an end to the practice.
A third Forbes contributor, Robert Rapier, makes the point that pipeline exports to Mexico and LNG shipments overseas will keep the rigs humming next year.
Rapier also picks up on the gas-to-plastics and chemicals trend, which crossed the CleanTechnica radar back in 2014. In particular, 2017 saw ExxonMobil ramp up its petrochemical business to the nth degree.
On The Other, Other Hand…
Natural gas advocates have been promoting it as a “cleaner” fuel than coal, but as the cost of renewable energy drops it’s not so evident that gas can compete with wind and solar in the cleanliness department.
Evidence linking natural gas drilling to a host of local environmental and public health impacts has been piling up, including asthma and low birthweight risks, along with seismic hazards mainly associated with drilling waste disposal.
Then there’s that little issue of natural gas and climate change,and that’s a whole ‘nother can of worms.
Meanwhile, electricity consumers are demanding more clean energy, without the environmental baggage.
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Image (cropped): via US Department of Energy.
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